Word: debtors
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...existing loans, so that Mexicans are not forced to postpone badly-needed services and internal investment to pay off the debt and to keep the U.S. dollar down. Foreign governments must also resist pressure for protectionist legislation which would cripple the export possibilities of Mexico and the other debtor nations in Latin America...
Mexico has long been a model debtor, keeping current on its interest payments to foreign banks. Even in the face of 20% unemployment, it has stuck to an austerity program that has slashed the country's inflation rate from 15.5% a month in January to less than 1% in September. Luck, however, has not been on the government's side, and the recent plunge in the price of oil, Mexico's principal export, threatens to create a new financial crisis and political unrest...
...borrowers suffer from what is called debt fatigue. When capital flows between borrower and creditor are measured, the harsh fact is that much more money is moving from debtor to banker than the other way around. In the past two years, 15 of the most indebted borrowers made a net transfer of $58 billion to their creditors. And it is not just commercial banks that have been collecting the cash. In fiscal 1988 the IMF took in $5 billion more in interest and principal payments on outstanding loans than it disbursed in new loans...
...reduced? At the World Bank-IMF meeting, the Japanese presented a general plan. Borrowers would exchange some loans for long-term bonds, unofficially dubbed "junk debt." Interest on those notes would be guaranteed by special funds set up by the IMF, although the money would come from the debtor countries. Remaining commercial bank debt would be rescheduled. Brady, in what was seen as an attack on the plan, suggested that the Japanese proposal would transfer private debt to the public sector -- that is, to taxpayers -- since the notes would be insured by an IMF-administered fund...
...marketing, after all.) I2D2 would buy Third World loans from commercial banks at a discount in exchange for bonds backed by industrial countries. The United Nations Conference on Trade and Development offers a far more radical proposal: an outright 30% reduction of private bank loans owed by 15 major debtor countries...